February 19, 2008 - Mayor Bill Haslam will ask City Council to approve an ordinance amending the City’s cable television agreement with Knology to require the company to spend at least five percent of its annual revenues extending its services across Knoxville.

Knology agreed to spend at least $2.1 million on the build out by 2015.

The amendment would also require Knology to provide free basic cable and high speed internet services to nine City recreation centers as well as adding CTV, the community access channel, to its cable offerings by March 31, 2008.

The proposed ordinance is the result of a settlement reached between the City and Knology over the cable company’s failure to abide by the terms of the franchise agreement it signed in April of 2000.

That agreement required Knology to offer cable and internet services throughout all of Knoxville, and include community television in its package, at a certain point – or pay damages in the amount of $5,000 per month until it did.

As of December 2007 the City estimated the damages at $400,000.

That amount, however, will be included in Knology’s build out of its cable and internet services.

As part of the proposed settlement Knology has committed to spending $750,000 for network expansion in 2008 alone.

Its initial plans are to expand in West and North Knoxville areas.

Knoxville originally signed the franchise agreement with Knology hoping that
would create competition in the cable market here that would ultimately translate into lower prices for the city’s citizens.

"We think it's in everyone’s best interests to apply the damages to the completion of the Knology's cable system," said Bill Lyons, senior director of the City's Department of Policy and Communications, "because that will give citizens a competitive cable and Internet alternative."

But Lyons also noted that the damages clause remains in the amended version of the franchise agreement and can be used if Knology fails to comply with the new terms.

The ordinance will be on the City Council agenda at the meeting on Feb. 26.